Medicare's historic cost increase pinching pockets

Apr. 24, 2013

Part B Medicare premiums were $3 per month in 1965 — half the actual cost. That shows the dramatic rise in medical care costs.

In 1972, the 50/50 had dropped so that only 25 percent of the cost was charged to beneficiaries. It wasn’t until 1997 that Congress, ever averse to raising seniors’ ire, established the sum of $43.80 as the 25 percent amount — far short of the total cost.

By 2003, Congress, belatedly realizing the dire situation, enacted legislation that linked the Part B premium to income.

2013’s typical premium is about $105 per month per beneficiary, but this is still linked to the 25 percent payment formula from 1972. Taxpayers got socked with the other 75 percent. Medicare currently charges “persons with higher income” a great sum — all the way up to $369 per month (IRMAA, in government language).

Today I read that the White House wants to raise further these surcharges. You can expect political backlash if they appear unreasonable.

With the system hemorrhaging, is it a stretch to believe that this IRMAA income threshold will drop — affecting those considerably under $100,000 annual income ($170,000 joint)? All these tables are on the Medicare website.

In the recent elections, blatant tax increases and entitlement reform were “off the table,” but watch out — threshold tweaking could occur and you may discover you’re considered affluent by Medicare!